- Facebook’s long-awaited digital currency has officially entered the crypto space after rebranding to get approval.
- The Diem Association has also announced a partnership with Silvergate to help offer the Diem USD.
Diem Association, the Facebook-aligned digital currency group, has officially announced the introduction of the Diem USD (DUSD), formally known as Libra into the crypto space. The USD-pegged stablecoin has gone through a series of challenges after policymakers and regulators tagged it as a threat to the existing financial system.
The launch comes with a couple of changes including the relocation of its operating country from Switzerland to the United States of America.
Diem is planning to launch the payment system from the USA in the first phase because initially, the project will focus on the USA as its target market.
Diem Network U.S, a unit of the Diem Association, has revealed that it will run a blockchain-based payment system in a bid to ensure that real-time transfer of Diem USD is done seamlessly. In addition, it will register with the U.S Department of the Treasury’s Financial Crime Enforcement Network.
Finally, it’s here
The Diem Association has also announced a partnership with Silvergate, a California-based state-chartered bank to assist in offering the Diem USD. Silvergate will also be involved in managing the DUSD reserved.
1/4 Diem is pleased to announce a partnership with @silvergatebank, a leader in financial innovation, for Silvergate to be the exclusive issuer of the Diem USD. Silvergate is a CA state-chartered bank and member of the Federal Reserve.
— Diem Association (@DiemAssociation) May 12, 2021
Stuart Levey, the Chief Executive Officer of the Association stated:
We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper, and takes advantage of blockchain technology to bring the benefits of the financial system to more people around the world.
The Diem Payment Network will currently operate as a permissioned network that will only allow transactions from approved participants.
The foundation of Facebook’s digital currency can be traced as far back as 2019 when the social media giant announced its intention to go beyond social networking to e-commerce and global payment. The digital currency was to be backed by a wide array of fiat currencies as well as short-term government debt. Their plan to offer financial services to people and power transactions that involve global consumers and businesses encountered several regulatory hurdles along the way, however. Some of the common concerns were that the Facebook stablecoin would reduce the monetary control of regulators, enable crime and affect the privacy of users. After all, Facebook isn’t known for respecting the data privacy of its users.
Last year, the team decided to halt its plan of backing the asset with major currencies and government debts, and go for approval from Swiss regulators. In December last year, they engaged in a rebranding to Diem and switched to a single dollar digital currency to get regulatory approval. Novi remains the digital wallet for the Diem payment system.